The NBA creates Two New Billionaires

January 25, 2015

Billionaire Steve Ballmer made headlines all over the world when he bought the Los Angeles Clippers for $2 billion in August 2014. It was an unprecedented price, shattering the record set earlier that year when a group led by hedge fund billionaire Marc Lasry bought the Milwaukee Bucks for $550 million. That big spending has led to NBA Team values skyrocketing across the board, and the average NBA team is now worth $1.1 billion, up 74% from $634 million last year.

It turns out that those surging values have made billionaires of at least two NBA team owners: Chicago Bulls owner Jerry Reinsdorf and Houston Rockets owner Leslie Alexander. Reinsdorf, who made his money in real estate, now has a net worth of $1.3 billion built entirely on pro sports. He has owned the Bulls since 1985, when he and other investors purchased a controlling stake in the team for $9.2 million. It proved to be perfect timing, as the Bulls had drafted North Carolina star Michael Jordan the previous year. With the best player ever at the helm the Bulls would win six championships in the 1990s, good for third-most in league history. Jordan became a billionaire in his own right last June after increasing his ownership stake in the then-named Charlotte Hornets.

The Bulls are now worth $2 billion double their $1 billion valuation from last year. Reinsdorf’s estimated 40% stake in the team is worth $780 million. Making up the remainder of his $1.3 billion net worth are stakes in MLB’s Chicago White Sox ($130 million) and Comcast SportsNet Chicago ($390 million), a regional sports network that also covers games for both teams.

The league’s other new billionaire owner, Leslie Alexander, started out on Wall Street, now worth $1.6 billion and would have been able to rejoin the billionaire club on basketball alone: His equity stake in the Houston Rockets is valued at $1.125 billion. Alexander bought the team in 1993 for $85 million, another well-timed purchase as the Rockets won NBA titles in each of the first two years that he owned the team. The team is now worth $1.25 billion, meaning that Alexander’s investment has averaged an annual growth rate of 13% since he bought into the league. Outside of the NBA he owns a vineyard, Alexander is a wine buff who recently started an exclusive wine club in the Hamptons, and $200 million worth of real estate, including a $42 million Manhattan penthouse.

While two new names are added to the NBA Billionaire club, others are closing in on the mar: Ted Leonsis has a stake in the Washington Wizards, which are now worth more than $770 million, in addition to the NHL’s Washington Capitals and WNBA’s Washington Mystics. And Gail Miller, who inherited ownership of the Utah Jazz from her late husband Larry Miller, has an ownership stake worth an estimated $800 million. Who would the best NBA tipster pick as the most likely to join that exclusive club first?